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EARLY START

Budget Negotiators Near 2-Year Deal; Trump Wants Military Parade; Successful SpaceX Launch. Aired 4:30-5a ET

Aired February 7, 2018 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)

[04:30:34] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Let's have a shutdown. We'll do a shutdown, and it's worth it for our country. I'd love to see a shutdown.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: All right. Congress inching toward deals on a budget and immigration. But then comments from the president and his chief of staff have one senior Republican saying he's holding his breath.

DAVE BRIGGS, CNN ANCHOR: After seeing this spectacle in France, the president wants a military parade in the nation's capital. Objections are being raised over using weaponry and American troops as political props.

ROMANS: And there it is. A successful launch for the most powerful rockets since the Apollo mission. The rocket passing beyond the orbit of mars. The way the rocket boosters landed beautifully on the launching pads, awesome.

Welcome back to EARLY START. I'm Christine Romans.

It made me sad for the old shuttle program.

BRIGGS: Took us back, didn't it, seeing our children watching inspired?

ROMANS: Yes.

BRIGGS: I'm Dave Briggs. Good morning, everybody; 4:31 Eastern Time.

We start with the possibility of yet another shutdown. The federal government runs out of money in about 43-1/2 hours. But leaders from both parties say they are near a deal to fund the government for two years. Can you believe that? Two years.

The Republican and Democratic leaders in the Senate huddling to hash out the remaining differences on defense and domestic programs. Sources say immigration and DACA have not been part of the spending talks.

ROMANS: Even so, negotiators on both sides got a brief scare when the president jumped into the issue.

(BEGIN VIDEO CLIP)

TRUMP: We don't get rid of these loopholes where killers are allowed to come into our country and continue to kill, gang members, and we're not just talking about MS-13. There are many gang members we already have mentioned.

If we don't change it, let's have a shutdown. We'll do a shutdown. And it's worth it for our country. I'd love to see a shutdown if we don't get this stuff taken care of.

(END VIDEO CLIP)

ROMANS: The White House later saying the president was not advocating for a shutdown. He said, quote, I'd love to see a shutdown.

Press Secretary Sarah Huckabee Sanders turning the president's shutdown comments back on to Democrats saying if they want to hold the government hostage over immigration, the president welcomes that fight.

BRIGGS: In case a budget deal is not settled by midnight tomorrow, the House passed a short-term bill funding most agencies through March 23rd and the Pentagon for a full year. Senate Democrats are likely to oppose it. That may not matter. Sources say budget negotiators are on track to announce a two-year deal as soon as this morning.

With the latest, CNN's Phil Mattingly on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Christine and Dave, there's no question the clock is ticking down to the government running out of money, essentially needing to extend a short-term funding agreement. But the biggest development that's occurred up to this point is not the usual kicking the can down the road. At this point in time, aides in both the Republican side and Democratic Senate of the Senate and House tell me they are on the verge of a major budget deal, something that would increase spending caps for both defense and nondefense discretionary spending, up to $300 billion, the type of deal that would essentially lock in a two-year budget agreement.

It would include an increase of the debt ceiling. It includes more than $80 billion in disaster relief for hurricane-ravaged Florida, Texas, and Puerto Rico. It would include some health care spending, as well. This is the kind of thing that lawmakers have been pointing to as a possibility, essentially clearing the decks of all these major items. It looks like they're finally there.

The big question now is, what are House Democrats going do? Democrats for a long period of time have held up the possibility of doing a deal like this because they want a DACA resolution. They need leverage to get that resolution. At least that's what aides in both chambers have been saying. Right now, Senate Democrats are very clearly on board. House

Democrats, wary, and House Democrats are going to be needed if it's going to have to move through the House. There's a lot of Republicans who are very uncomfortable with the large number of spending increases which means Speaker Paul Ryan is going to need obviously some Republicans. He's going to need a lot of Democrats, too -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: All right. Phil, thank you.

White House Chief of Staff John Kelly standing by his comments about undocumented immigrants that some saw as demeaning. In audio posted by the "Washington Post", Kelly tried to draw a distinction between the nation's 690,000 DACA recipients and about one million others who potentially qualified for the program but didn't register.

(BEGIN AUDIO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: The difference between 690,000 and 1.8 million were the people that some would say were too afraid to sign up, others would say were too lazy to get off their asses but they didn't sign up.

(END AUDIO CLIP)

[04:35:05] BRIGGS: We should note, it does cost $495 to apply for DACA status. Kelly was confronted by lawmakers in a closed door meeting about those comments. According to people in the room, he repeated the sentiment. White House Press Secretary Sarah Huckabee Sanders tried to spin the lazy label on the Democrats.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: We're focused on actually getting a solution. And, frankly, I think if anybody's lazy, it's probably Democrats who aren't showing up to work, and aren't actually getting to the table to make a deal on this.

(END VIDEO CLIP)

ROMANS: Kelly also told reporters it's not likely President Trump will extend the March 5th deadline he gave Congress to act on a DACA plan.

One key player in the talks, Republican Senator Lindsey Graham has renewed optimism.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I felt really bad yesterday. I feel better today. Democrats are openly talking about $25 billion for a wall plus other things. The president tripled the number of people under DACA. So, we're back in the ball game.

(END VIDEO CLIP)

BRIGGS: Republican Senator Susan Collins adds Majority Leader Mitch McConnell could begin the immigration debate by allowing both sides of the aisle to offer amendments as opposed to introducing a bill written behind closed doors exclusively by Republicans.

ROMANS: John Kelly says he expects recommendations by tomorrow on how to handle the Democratic memo rebutting Republican claims of surveillance abuses by the FBI. Kelly says the Democratic memo is lengthier than the GOP's and claims the White House is not leaning in either direction when it comes to releasing it to the public. But he did offer up this warning --

(BEGIN AUDIO CLIP)

KELLY: Where the first was clean relative to sources and methods, my initial cut is this one is a lot less clean. But at the end of it all, it will be guys like Rod Rosenstein, Chris Wray from FBI, certainly the national security attorneys at the White House giving the president a recommendation on it.

(END AUDIO CLIP)

BRIGGS: Important to note, FBI advised against releasing the Republicans' Nunes memo, but the president did it anyway. Mr. Trump met Tuesday with Deputy Attorney General Rod Rosenstein about the Democratic memo. The president targeted Rosenstein after the Nunes memo was released. Trump received the Democrats' document Monday night and is working with a five-day window to make a decision.

The president ordered the Pentagon to plan for a military parade this year. The White House calls it a celebration to show appreciation for U.S. service members. The Pentagon says it's early in the process. And the "Washington Post" first reported this story about the president's request, something that could cost millions of dollars to ship tanks and military hardware into the nation's capital. Such displays are rare in the United States.

"The Post" reports the president looking for a parade like the one he attended in France last year as a guest of President Emmanuel Macron on Bastille Day. He later marveled about the parade as one of the greatest he had ever seen.

ROMANS: All right. Thirty-seven minutes past the hour.

Volatility is back. U.S. stocks roaring higher after first taking a nose-dive. Some global stocks now losing steam overnight after U.S. futures turned lower. We've got Dow futures down 1 percent. Asian stocks stalled after a strong start. So, really, anything could happen this morning, guys.

Wall Street ended higher after a wild day. The Dow swinging over a 1,200-point trading range in one day, changing direction 29 times before closing up 567 points. That's about 2 percent. The S&P 500, that's sort of the better gauge really of the total stock market, up about 1.7 percent. The sell-off was sparked by a few things -- rumblings in the bond

market, concerns about wage inflation, whether that will force the Federal Reserve to raise interest rates sooner than planned, posing a risk to a bull market that is nearly nine years old. But as stocks turned volatile, the cheerleader-in-chief, the president, has been quiet.

Testifying in Capitol Hill yesterday, the treasury secretary, Steve Mnuchin, said the economic fundamentals are quite strong. When asked if the Trump administration would accept blame for the recent market drop --

(BEGIN VIDEO CLIP)

STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I think we'll still claim credit for the fact that it's up over 30 percent since the election.

(END VIDEO CLIP)

ROMANS: He is referring to the Dow. Up 35 percent since Election Day.

BRIGGS: Steve Wynn stepping down as CEO of Wynn Resorts after allegations of sexual misconduct. Wynn denied the allegations first reported by the "Wall Street Journal." Now, he says he can't be effective in his role claiming the environment prioritizes a rush to judgment over the facts.

As the news broke, CNN's Miguel Marquez was actually speaking with Charlotte Arrowsmith. She's a plaintiff if a 1998 case involving allegations against Wynn.

She celebrated with a toast.

(BEGIN VIDEO CLIP)

CHARLOTTE ARROWSMITH, PLAINTIFF IN WYNN CASE: Oh, hallelujah! Thank you, lord. Something positive has final come from this.

You have -- I know it doesn't hurt him. I know it doesn't hurt Wynn Resorts. He has other licensees.

I know all of this. But I'm going to tell you something -- after all he put us through, he needs to be humiliated.

(END VIDEO CLIP)

[04:40:07] BRIGGS: The accusations also cost Wynn his job as finance chairman of the Republican National Committee. Wynn resorts' president, Matt Maddox, becomes the new CEO.

ROMANS: Yes, watch that stock, it was hammered over the past week or so.

Democrats capturing a state legislative seat in a Missouri house district that President Trump won by nearly 30 points. Mike Revis winning a special election, 52-48, over Republican David Linton. The GOP successfully defended three other seats in special elections, but there were major voter swings toward Democrats.

Revis' win is welcome news for Missouri's Democratic senator, Claire McCaskill. She's considered one of the most vulnerable incumbents facing re-election this year.

BRIGGS: Former Vice President Joe Biden putting it politely. He says President Trump has difficulty with precision. Biden telling our Chris Cuomo if he were the president's lawyer, he would advise against talking to Robert Mueller. Biden saying it is possible the president could say something that was not true without even planning to be disingenuous.

(BEGIN VIDEO CLIP)

CHRIS CUOMO, CNN HOST: Do you think he has that little control over whether he tells the truth or not?

JOE BIDEN, FORMER VICE PRESIDENT: I just marvel at the things he says and does, like what, two days ago, anybody didn't stand up and clap for him was un-American, and then maybe treasonous?

CUOMO: They say it was tongue-in-cheek. Democrats can't take a joke.

BIDEN: Let me tell you, he's a joke.

(END VIDEO CLIP)

BRIGGS: Wow. The president's allies say he's still eager to speak with the lawyer team -- the team as his lawyers tried to delay or stop on a potential sit down.

ROMANS: All right.

BRIGGS: It was a time when Biden's comments shocked us. The time has passed.

ROMANS: Vice President Mike Pence meeting moments ago with Japan's prime minister vowing to stand shoulder to shoulder in the face of the North Korean threat. We go live to South Korea.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[04:46:06] MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: Security is the foundation of our prosperity. And security in the Endo Pacific is the main reason I came to Japan today. The United States and Japan will continue to confront the most dangerous threat in the Endo Pacific, the rogue regime in North Korea.

(END VIDEO CLIP)

ROMANS: Vice President Mike Pence in Tokyo this morning. Moments ago as you heard, alongside Prime Minister Shinzo Abe, the vice president vowed to stand with Japan in the face of North Korea's provocations.

CNN's Ivan Watson live in Pyeongchang where members of the North Korean delegation are now arriving for the Olympics.

Ivan, bring us up to speed.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it is a substantial delegation here, approaching 500 people. And it's going to grow even bigger when the leaders of the delegation arrive shortly. And that is to include the sister of the North Korean leader, Kim Jong-un.

Her name is Kim Yo-jong. She's a member of the politburo. And she would be the first-ever member of the Kim dynasty to come to South Korea. So, if she does in fact come, that's going to be a big deal for North and South Korean relations.

Meanwhile, you had Vice President Pence, the Japanese Prime Minister Shinzo Abe, giving a joint speech, and their mention was essentially do not be fooled by the North Korean kind of public relations offensive around the Olympics.

Take a listen to an excerpt of what Vice President Pence had to say.

(BEGIN VIDEO CLIP)

PENCE: This week, as the world knows, North Korea is sending a delegation to participate in the Winter Olympics. They'll march under the same banner as South Korea. But we should not forget that North Korea and South Korea have marched under the same banner before, only to see North Korea continue its pursuit of threats and provocations.

(END VIDEO CLIP)

WATSON: Now, Christine, Pence went on to say that the U.S. will soon unveil what he described as the toughest and most aggressive round of sanctions on North Korea ever. Amid that tough talk, though, he has avoided ruling out the possibility of meeting with the North Koreans here in Pyeongchang, one important note to keep an eye on -- Christine.

ROMANS: Ivan Watson for us -- thanks so much for that.

BRIGGS: Meanwhile, nearly 90 people are still unaccounted for in Taiwan following a 6.4-magnitude earthquake. The Taiwanese news agency says at least seven people have died and more than 250 were injured. The quake was centered in the East China Sea, some 13 miles north of the city of Hualien. Several cities collapsed, others left barely standing. It could be felt the capital of Taipei, that's about 75 miles from the Hualien.

ROMANS: All right. There's a star man waiting in the sky. Elon Musk sent his personal Tesla roadster into space, complete with a dummy passenger aboard SpaceX's latest rocket.

(COMMERCIAL BREAK) [04:53:34] ROMANS: A Pennsylvania Republican lawmaker wants five state Supreme Court judges impeached over their decision to order congressional maps redrawn. State Representative Chris Dush circulating a letter to colleagues arguing the justices blatantly violated the state constitution by giving judges power that he believes belongs to the legislature. Now, the letter comes one day after the U.S. Supreme Court refused to block the state high court order to redraw gerrymandered congressional districts. That ruling could tip the balance of power in the U.S. House. Republicans currently hold 12 of the state's 18 U.S. House districts.

BRIGGS: Amtrak says it is inspecting all Acela trains after yet another safety incident. Two rail cars separated Tuesday morning on an Acela train headed from Washington to Boston. A very popular trek there.

Amtrak's statement says only that there was a mechanical issue. No injuries were reported. More than 50 passengers were transferred to a regional passenger train. Amtrak says it's investigating the cause of the car separation.

ROMANS: All right. The driver suspected of hitting and killing Indianapolis Colts linebacker Edwin Jackson and his ride-share driver on Sunday will now face federal immigration charges. Thirty-seven- year-old Manuel Orrego-Savala, an undocumented immigrant from Guatemala, has an initial court hearing this morning. Prosecutors say he illegally reentered the country. He has been deported twice.

[04:55:01] A spokesman for the Colts says team owner Jim Irsay will be paying for the funerals of both Jackson and the driver, Jeffrey Monroe.

BRIGGS: A stunning about-face by Patriots' offensive coordinator Josh McDaniels just hours after the Indianapolis Colts announced he would be their new head coach. McDaniels reneged on the agreement, choosing instead to remain with New England. ESPN reports McDaniels had been wavering on his decision to leave the Pats. And owner Robert Kraft sweetened the contract to keep him.

The Colts -- unfortunately, all the people they have interviewed for that job now have accepted head coaching jobs.

ROMANS: All right. The winner of a $560 million Powerball jackpot in New Hampshire has not collected her winnings yet. Instead she is suing to stay anonymous. Her lawsuit filed under the name Jane Doe in New Hampshire superior court, claims she should not have to identify herself as a winner because such a disclosure would constitute a significant invasion of her privacy. The Powerball rules say the winner needs to reveal their identity in order to protect the security and integrity of the lottery.

In some states, you can be anonymous. But Powerball, no.

BRIGGS: Well, if you're them, you want everybody to come forward, talk about your story. That sells the image of the lottery.

ROMANS: A business model.

BRIGGS: Makes sense you'd want that to happen.

Meanwhile, nearly 90 million people under winter weather conditions this morning from Oklahoma to Maine. Heavy snow and rain forecast all along the eastern seaboard.

For the latest, let's get Pedram Javaheri.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Dave and Christine, Pretty busy morning across portions of the Northeast. And even stretches farther back out toward the West, as well. We do have winter weather advisories. Winter storm warnings, and a lot of these could play a little bit of a role when it comes to travel disruptions at the airports and certainly on the roadways into the early morning hours as the moisture is plentiful.

Tapping into gulf moisture here, getting some thunderstorms, at one point this morning, upwards of 200 lightning strikes per hour. We know these storms mean business. Very mild on the southern periphery of it. A little bit warmer to the North.

So, with the elements in place for not only just freezing rain but also some heavy snowfall as you work your way into interior New England, as much as a if the and a half or more could come down across portions of New England. But to the south, all rain. Some areas could see two to four inches across, say, northern Louisiana, parts of Alabama, and Mississippi, as well.

And the ice coverage is pretty expansive. Around Louisville, Columbus, Pittsburgh, even just west of town in New York City there could see some ice begin to accumulate with some freezing rain that is in store. A lot of that means travel disruptions. Highs in Chicago in the teens. Down in the south, into 60s and 70s.

(END VIDEOTAPE)

ROMANS: All right. Pedram, thank you so much.

That's your weather. Here's your money. Let's get a check on CNN "Money Stream" this morning.

Volatility is back. Markets around the world adjusting to the new reality, the era of low interest rates is over. U.S. stocks tanked, then roared the back for a big gain. Now, overnight, happening right now, the anxiety looks like it's returning a bit here. Some Asian markets fell, U.S. futures turned lower, Dow futures down about 200 points right now. But Europe is higher. We'll see if that holds.

Yesterday was simply remarkable. The Dow swinging in a range of 1,200 points, changing direction 29 times. Then up 567 points, 2.3 percent for the close. Big swings and big closes higher for the Dow, the S&P 500, and the Nasdaq. Snapchat's stock is soaring 20 percent after ending its earnings'

losing streak, finally posting sales in user growth for the first time since going public. Sales grew 72 percent from a year ago. Snap ads moving to an automated ad sales auction, helping prove to advertisers that the Snapchat app, say that five times fast -- is a strong alternative to both Google and Facebook.

All right. This is the coolest story of the morning. SpaceX has launched the world's most powerful rocket pulling off the seamless first ever launch. The Falcon Heavy took flight yesterday from Florida's Kennedy Space Center before a crowd of thousands. The success stunned founder Elon Musk, calling it surreal.

The launch was not the only achievement, as cool as that was. Then SpaceX, look at that, we showed again, guided two first-stage rocket boosters back to earth beautifully synchronized. A third booster was supposed to land but crashed.

President Trump tweeted: Congrats. This achievement along with NASA's commercial and international partners continues to show American ingenuity at its best.

Elon Musk born in South Africa, an American citizen now, proud immigrant of this country.

As the rocket heads into space, on board is musk's personal Tesla roadster with a dummy, star man, behind the wheel. The car will play David Bowie's "Space Oddity" on repeat. Cool, cool, cool.

BRIGG: "Don't panic" right there on the dash. What a great --

ROMANS: Science rocks. Science rocks.

BRIGGS: All right. EARLY START continues right now with the likelihood of yet another shutdown.

(MUSIC)

(BEGIN VIDEO CLIP

TRUMP: Let's have a shutdown. We'll do a shutdown, and it's worth it for our country. I'd love to see a shutdown.

(END VIDEO CLIP)